Reserve Bank of India Monetary Policy 2024: Reserve Bank of India Governor Shaktikanta Das will announce the bimonthly policy today (February 8) as key interest rates are expected to remain on hold as inflation remains close to the 6% ceiling.
The Monetary Policy Committee (MPC) headed by Governor Das began three deliberations on Tuesday (February 6).
The Monetary Policy Committee is responsible for deciding the policy repo rate to achieve the inflation target, taking into account the growth target.
RBI monetary policy timing
Das will announce monetary policy at 10 am.
repo rate
The Reserve Bank has held the short-term lending rate, or repo rate, steady at 6.5% for a year.
The benchmark interest rate was last raised in February 2023 from 6.25% to 6.5% to curb inflation driven mainly by global developments.
inflation
Retail inflation in the current financial year has declined after peaking at 7.44% in July 2023, but remains high at 5.69% in December 2023, although still within the Reserve Bank’s comfort zone of 4-6%.
Anticipated pause
The State Bank of India (SBI) said in a report that it expects the Reserve Bank of India to continue to adopt a pause stance on upcoming policies.
“Strong U.S. non-farm payrolls data and wages appear to have pushed back market expectations for a quick rate cut,” it said, adding that a first rate cut could come in the June-August period which “looks best” now. bet”.
The state-owned bank also expects the Reserve Bank of India to continue to withdraw its easing stance.
SBI further said that it expects the CPI to rise by around 5.4% in the 2023-24 fiscal year and 4.6% to 4.8% in the next fiscal year (2024-25).
Experts in various industries believe that the central bank will not adjust the repo rate for the sixth consecutive time, which is currently 6.5%, mainly due to concerns about inflation.
The government has tasked the central bank to ensure that retail inflation based on the Consumer Price Index (CPI) remains at 4%, with a margin of 2% on either side.
At an off-cycle meeting in May 2022, the Monetary Policy Committee raised the policy rate by 40 basis points, followed by hikes of varying magnitudes in each of the five meetings until February 2023.
From May 2022 to February 2023, the repo rate will be raised by a cumulative 250 basis points.
Member, Reserve Bank of India Monetary Policy Committee
The Monetary Policy Committee consists of three external members and three RBI officials.
External members of the team include Shashanka Bhide, Ashima Goyal and Jayanth R Varma. Apart from Governor Das, other RBI officials on the Monetary Policy Committee include Rajiv Ranjan (Executive Director) and Michael Debbrata Patra (Deputy Governor).
(with PTI input)
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